Skills Management

The key to successfully developing and unleashing talent in your organization.

To realize the full potential of your workforce, it is essential to identify, develop and promote the skills of your employees. An effective skills management approach can not only help improve employee performance and motivation, but also boost your company’s competitiveness, agility and growth. Learn more about how you can prepare your workforce for the future and put your company on the fast track!

Core elements on the way to a skills-based organization

To successfully implement the skills management approach, four core areas are critical. This includes defining your specific target for skills management, ensuring a seamless integration into personnel-related processes, selecting a skills management software tailored to your unique organizational requirements, and implementing a change management initiative to address any potential resistance. Together, these elements form the foundation for a successful skills management initiative that improves the alignment of employee skills with business goals and leads to higher workforce satisfaction.

More information about the core elements is available in our Ultimate Guide.

Skills Management

The Ultimate Guide

Learn everything you need to know about skills management.

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Defining a target vision for skills management

To initiate your journey into skill management, your organization must first define its vision for skills management. Job-based organizations can strategically select which aspects of skills management to integrate and at what level.

The graphic below illustrates the range within which organizations can operate in terms of skills: from hierarchical, job-based organizational structures without consideration of relevant skills of jobs, positions, and employees, to skills-based organizations where skill management is integrated into the organizational structure and relevant HR processes are based on skills. Shifting towards a fully skills-based organization is only useful for a few organizations: Company-specific factors such as industry, corporate culture, or works council focus play a crucial role to consider when defining the different goals.

Vision Skills Managament

Consider an externally moderated stakeholder workshop to explore various applications across the employee lifecycle (e.g., recruiting, performance and goal management, compensation and benefits) and other organizational functions (e.g., strategic workforce planning, staffing). This can facilitate the company-specific definition of skills management integration levels for each aspect within these dimensions.

Integrating skills management into personnel-related processes

For a successful implementation of skills management, a holistic approach has proven its worth – because the topic is both, multifaceted and complex. But why is a consistent skills framework (i.e., a consistent skills ontology or skills taxonomy) and the inclusion of all HR-related processes and IT systems so important for the implementation of skills management?

Skills management affects all personnel-related processes. However, skills can not be used in the same manner within the different processes. In order to benefit from skills management across all processes, different skills-related information is needed depending on the context. The following selected examples illustrate this based on some HR-processes (mouse over):

Recruiting

For recruitment, it is essential to identify the critical skills required for each open position. Additionally, understanding which skills are merely ‘nice to have’ helps candidates assess their suitability. Aligning the position requirements with candidate expectations ensures a more effective hiring process.

Learning

Employee skill profiles and comparing them with skill requirements for positions give employees and talent managers a clear understanding of their capabilities, strengths, and areas for development. Additionally matching skills to offered trainings enables individualized learning suggestions.

Career Development

The comparison between employee skill profiles and the skill requirements of jobs enables a clear outline of possible career paths and development potential.

Performance Management

Aligning skills with key performance indicators allows for more precise assessments and targeted improvement plans. However, achieving this necessitates an ongoing update process, in addition to the initial skill validation. Furthermore, a well-defined concept for the duration of validity of a skill validation is essential.

Talent Marketplace

To ensure a successful alignment of employees with (project) positions, jobs or gigs, respective descriptions must include the required skills. Additionally, employees should maintain continuously updated profiles of their (validated) skills.

Compensation & Benefits

To fairly compensate work based on skills or in acknowledgment of employee competencies, it is essential to establish validation mechanisms for all skills. Additionally, a clear understanding of the value of each skill is necessary.

Different skill views require different skill information. The overall goal should be to enable the organization to use skills in each personnel-related process in a different manner, and at the same time ensure the consistent use of skills across all processes.

A pragmatic start can be defining the required skill sets for jobs by linking them with your job architecture. Tools like Colmeia can help with AI-generated or refined jobs, role-based skills and descriptions to easily develop an excellent starting point that aligns your skills framework with your job architecture and supports an employee mapping.

Selecting the suitable skills management software

The selection of a suitable skills management software and the design of a future-oriented software architecture is crucial for the success of the transition to a skills-based organization. The following aspects pose a particular challenge.

Variety of software providers and solutions

Skills management is diverse and the choice of software solutions seems almost endless. Companies are spoilt for choice between different providers and a wide range of functions. Global players like SAP SuccessFactors, Gloat or Workday dominate the market with their comprehensive HR solutions, while specialized providers like Textkernel, Lightcast or Neobrain focus on specialized skills management tools. German software vendors such as HRForecast and Cobrainer have also made a name for themselves with their solutions.

Accuracy of fit with HR needs

Skills management solutions offer a wide range of capabilities that support along the employee journey – from recruiting to learning and development to employee offboarding – and beyond.
From job posting and CV parsing, to identifying skill gaps and planning and implementing training accordingly, to succession planning, these tools offer a wide range of options for realizing the potential of the workforce. In addition, skills management solutions can also assist with strategic workforce planning and analysis of employee data to increase efficiency and productivity.

Integratability into existing HR IT landscape

The integration of skills management software into the existing HR IT landscape can be challenging. Therefore, integrating one or more skills management softwares requires careful planning, architecture and implementation to ensure that the new technology interacts smoothly with existing systems and avoids redundant data collection. In this way, HR workflow and the employee experience can be made as seamless as possible.

Consideration of the needs of employees

Successful implementation of skills management depends to a large extent on how well the needs of employees are taken into account. Only if the software is also highly user-friendly, meets the individual requirements of employees and delivers direct employee benefits will the skills management software meet with acceptance among users and also be used in the long term.
For this reason, it is essential to include the needs and feedback of employees when selecting and implementing the software. Ultimately, everyone involved should benefit from the implementation: The employees from a more efficient and goal-oriented work process and the company from higher productivity and better work results.

Compliance with data management and security regulations

All solutions today work more or less intensively with the possibilities of artificial intelligence. When selecting skills management software, companies should pay particular attention to compliance with data and security requirements. Not only is the implementation of suitable protective measures by the provider important, but also the question of where and how the data of employees and candidates is used and stored.
The software must meet the specific data protection and security requirements of the company in question. It is therefore essential that the software provider’s data and security policies are carefully reviewed to ensure that they comply with applicable regulations and provide an appropriate level of protection for employee data.

Careful consideration and weighing of various factors is necessary to find the appropriate software solution that meets the needs and requirements of the company (especially HR and IT) and its workforce.

Each software has its specific features and benefits that need to be carefully weighed by decision makers. Those who make the right choice can individually improve the skills as well as the retention of their employees and sustainably increase the success of the company.

“Every skills management project starts with the same step: Decide which area you want to improve primarily and start from there. Although, not without understanding all skill-related needs and a strategy for a cross-functional implementation.”

Dr. Ralph Köppen - Managing Partner

German Association for Human Resource Management

Keynote Speech

In June 2023, we held a keynote speech at the skills management conference of the German Association for Human Resource Management (DGFP). Topic: How to find the best skills management software for your specific needs and requirements.

MORE INFORMATION

Non-exhaustive selection of skills management software providers

Skills Managemetn Software Provide

Implementing a well planned change management

The introduction of skills management brings a number of (cultural) changes for the entire organization (including managers, employees, HR, works council). A well-planned change management helps to involve all stakeholders, to understand their concerns, and to accompany them through the change process. This builds trust, reduces resistance, and promotes acceptance of skills management.

Thus, a successful change management adresses risk factors like the following:

Little acceptance of internal mobility

A common phenomenon in large organizations the tendency of departments to focus on the optimization of their own area primarily, instead of overall corporate objectives (silo mentality). This might make it more difficult for employees to find interesting career options within the whole organization, since managers tend to keep talents in their own team. However, this contradicts the idea of skills management, which is to promote internal mobility in order to allocate employees as effectively as possible according to their qualifications and interests.

Concerns about changes through skills management

Regardless of potential benefits, the introduction of skills management comes along with underlying changes. New processes, structures and (in most cases) tools are implemented, which often means an additional workload for employees and managers during the transformation phase, as well as getting used to new work flows. Additionally, it should be kept in mind that skills management also affects employees on a personal basis. For example, it concerns individual skills, further development of the professional career and the professional identity – topics that can be relevant in terms of self-worth and identity. Skills management may raise concerns about the planned changes and leads to uncertainty or even resistance during the implementation, so building trust is important.

Deference to the use of artificial intelligence

The HR department may reject the implementation of artificial intelligence, perceiving it as a loss of ‘human touch’ and personal interactions within the HR processes. It’s important to communicate the benefits of AI, emphasizing on how it can support focusing on value-added activities instead of routine tasks.

Reservations about potential surveillance of employees

The works council may have a negative perception of the planned initiative, interpreting skills management as a potential surveillance of employees. It is therefore important to emphasize the voluntary use of skills management as well as assurance regarding data security and individually restriction to the access to and use of employee’s personal data.

How to realize the change successfully?

Continuous change management creates trust and transparency, which ensures a successful implementation of skills management in the organization. It covers:

Cultural change initiative

  • Creating awareness regarding the value of skills management to foster a positive mindset for using skills
  • Encouraging leaders to support talent allocation through skills-based talent pools

Stakeholder management

  • Identification and involvement of all stakeholders, e.g. managers, employees, works council
  • Early communication about planned steps and positive effects for organization, departments, teams and individuals

Training opportunities

  • Identification of barriers and challenges that might inhibit employees’ use of the new software
  • Support of employees with trainings and best practices to help them in the handling of the new software

Insight into skills-based aspects of one of the world’s largest HR transformations

A German automotive group has decided to migrate existing HR processes and systems into a central SAP SuccessFactors solution. Several hundred thousand employees are affected by the changeover, which also includes a redesign of job and skills management.

Go to Use Case: Job & Skill Catalog

“I look forward to hearing from you and our personal exchange.”

  • Dr. Ralph Köppen
  • Managing Partner
  • Expert for Skill Management
Learn more about Binder Consulting

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